Goldstein v. Denner (Bioverativ)
Case Summary
Robbins Geller Prosecuted Claim that $11.6 Billion Sale Was Corrupted by Insider Trading
Robbins Geller Rudman & Dowd LLP and co-counsel represented shareholders in a case challenging the 2018 sale of Bioverativ, Inc. to Sanofi S.A. for $11.6 billion. In May and June 2022, Vice Chancellor J. Travis Laster of the Delaware Chancery Court issued two opinions denying motions to dismiss a set of claims challenging the sale process and disclosures, and another set of claims alleging that corporate insiders had engaged in illicit insider trading in advance of the sale. In September 2023, the court approved a partial settlement, settling the claims challenging the sale process and disclosures in exchange for a payment of $84 million. In April 2024, just one week before trial was set to begin, the Firm secured another $40 million for investors, resolving the insider trading claims.
The $40 million recovery is the first time shareholders have directly obtained a recovery based on insider trading under Delaware law. In total, our Firm secured $124 million for Bioverativ shareholders in litigation challenging the company’s sale, representing one of the largest recoveries ever in a challenge to a third-party, arm’s-length M&A transaction.
Robbins Geller and their client conducted a pre-suit investigation of corporate books and records related to the transaction and uncovered key documents. Leveraging these key records, the case alleged that directors and officers of Bioverativ breached their fiduciary duties during the sale and failed to disclose material facts, and that Alexander Denner – a Carl Icahn protégé, activist investor, and former Bioverativ director – breached his fiduciary duties by causing his hedge fund, Sarissa Capital, to engage in insider trading.
Vice Chancellor Laster issued a 124-page opinion in May 2022 denying defendants’ motions to dismiss the breach of fiduciary duty claims respecting the sale of the company. In June, the court denied the defense motion to dismiss the insider trading claims, concluding in a separate opinion that it was “reasonable to infer” that Denner traded on material, nonpublic information about Sanofi’s desire to buy the company, and then designed a single-bidder sale process to “serve his own interests in maximizing his short-term profits from insider trading at the expense of generating greater value through a competitive bidding process or by having the Company remain independent.” The court also issued an important opinion in January 2024, imposing sanctions on defendants (including evidentiary presumptions) as a result of their failure to preserve relevant text messages.
Upon approval of the final settlement, partner Randall Baron observed that “our client showed tremendous courage and fortitude in rejecting an early offer that would have benefited him but not other Bioverativ stockholders, and then pursuing this case to the end and to a historic result. I think there’s also an important lesson here – when corporate directors use their position of trust to benefit themselves instead of the stockholders they serve, they will be held accountable.”
Robbins Geller attorneys Randall Baron, Rick Atwood, and Christopher Lyons litigated the case with co-lead counsel at Prickett, Jones & Elliott P.A., and shareholders were led in the case by anesthesiologist/investor Stewart N. Goldstein, M.D.
Goldstein v. Denner, C.A. No. 2020-1061-JTL (Del. Ch.).